On Monday, Consumer Financial Protection Bureau (CFPB) the federal agency announced it was creating a public registry to help law enforcement, investors and the public check the history of repeat offenders in finance. The CFPB already offers consumers who have been victimized by a financial firm the ability to file a public complaint with the CFPB. The agency then quickly demands a written response from the alleged wrongdoer. Repeat offenders dislike the fact that these complaints go into a permanent database at the CFPB, which can be mined by the public, reporters, attorneys and prosecutors looking for patterns of fraud.
On Tuesday, the CFPB released a circular letting financial firms know that if they sneak deceptive and/or illegal terms into the fine print of their consumer contracts they risk getting an enforcement action from the CFPB. One example cited was the Truth in Lending Act, which prohibits fine print in mortgage contracts that purport to force homeowners into mandatory arbitration (claiming to remove the option of a court proceeding) to deal with a mortgage dispute.
